Wednesday, May 16, 2012

GM Face-Off

Genuinely interesting business stories are so rare. The Dow is off because the Greeks don’t want to play? Again? How many more times? An investment bank is rocked by losses? Again? The stock of a company leaps on news that it will have massive layoffs? Yawn.

The news today that GM will no longer advertise on Facebook, having, as it were, tested the waters by spending $10 million—why that is something worth contemplation. Have I said it before? Probably. Certainly on the old LaMarotte. I’ve felt, ever since my own days in advertising, which now seems pre-historic, that justifying ad expenditures by results may not be possible, with any precision, unless you’re advertising in the Wanted sections of papers. Well, GM has found the way to do so, and evidently FB does not deliver.

Our latest “industries” consist largely of banks of computers and software connected to the Internet: Facebook, Twitter, LinkedIn, and their imitators. They depend on building up massive bases of names and e-mail addresses—“monetizing” which to channel advertising messages is where the “industry” actually is.

Assemble a huge crowd in an abandoned drive-in movie theater and then show them masses of ads on a huge screen. Is that the model? No. Not really. Assemble a huge crowd in an abandoned drive-in movie theater and then show them a tense thriller on the huge screen. But scatter postage-stamp-sized little ads on the grounds so that the few who have to go to the toilet in the dark might see them, bend down, and pick them up. That’s the model at work on the social media.

A question today sent me to FB; I am one of the millions Facebook counts as its monetizable base, but I visit the site only rarely. Okay, I am a minority perhaps. Still, I did my business there. It’s content is immensely rich, complex, all those people who are my friends, all the stuff they say, the links they provide, the pictures. Did I even notice the ads on the right? No. Did I look there? No. I’ve learned to ignore the right column precisely because I know that it holds ads. Can’t do that when watching TV. That’s where the mute button comes into play.

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